tlecam wrote:

I'm interested in insights on what this JV does to the competitive landscape of the three major alliances for TPAC. In recent years, SkyTeam seemed to be at a disadvantage (to me anyway) because the other alliances have major anchors on both sides of the ocean - OneWOrld has AA/JAL and Star has UA/ANA. Now with DL/KE, what are some changes that we could see in the next 3-5 years?

From my perspective, what we'll see in the next five years in the same natural evolution that we've seen in the last five.

Delta will continue its steady drawdown of NRT and the center of gravity for Delta (and SkyTeam) across the Pacific will shift, finally and permanently, to ICN. The reorientation of the Delta-Korean network around gateways at ATL, DTW, LAX and SEA will provide extensive connectivity between markets deep within the U.S. and markets deep in Asia. And I'm sure Delta will also, to the extent it's permitted to do so, continue to deepen its separate "strategic alliance" with China Eastern - although I still believe Delta and China Eastern/PVG will be firmly a China story, as opposed to an Asia, story, due to all the oft-discussed challenges and shortcomings that come with PVG as a connecting hub.

The United/ANA JV will continue its unmatched position as the leading (and in some ways, arguably dominant) competitive force between the U.S. and the principle cities of East Asia. United will continue to leverage the combination of platform (787) and place (SFO) to offer unrivaled nonstop access from a U.S. gateway hub into Asia. I will say, though, that at this point there aren't a whole lot more places I could plausibly see ANA growing in the U.S. out of NRT, or see United growing in East Asia out of SFO. There are some gaps, but this network is already pretty dense.

And in the case of AA/JAL, I think it will be interesting to see what happens when JAL resumes meaningful longhaul growth. Here, too, though, I don't realistically see a whole lot more major growth. I could imagine AA plausibly adding another few nonstop flights from the U.S. to Asia - routes like LAX-ICN - but not much. AA has already done most of what it needs to do to build a nonstop Asia network broadly competitive with Delta. As for JAL, it's a similar story - I could see a few more U.S. 787 routes, like SEA, and maybe PDX and a few others, but not much. Outside the oneworld JV, I don't think AA's new "strategic alliance" with China Southern will lead to any significant new AA growth to China other than finally starting LAX-PEK and bolstering AA's access beyond PEK/PVG into China.

commavia wrote:

At this point, the only Asian city that I think could even be a plausible candidate for a beyond-ICN 5th freedom flight operated by Delta itself would be SIN, owing to its prominent global economic significance. But I agree that even that seems like a stretch when Korean operates three daily flights from ICN. As for Delta's few other remaining 5th Freedom flights between NRT and Asia, it's very hard to imagine MNL getting a Delta flight to/from ICN, due to both a similarly-strong existing Korean offering in the market, and just the broader economic dynamics of the market. And as for PVG, I continue to expect those seven China frequencies to be shifted off this route and onto either LAX-PEK or ATL-PVG.

I must say, the timing of flights from ICN to SIN are terrible, would be great to have more choice (even with the three daily flights), then again I don't know how keen Delta would be on keeping only one through flight.

Since DL is the 2nd largest airline across the Pacific and KE is the 3rd largest, the JV will most certainly change the dynamics of transpacific air transportation. Taking 2 airlines that didn't want to look at each other and now have them work very closely together creates enormous potential.

The formation of the DL-KE JV is about finding a way forward for DL's Pacific operations in the post-NRT hub world. SEA-Asia is part of it but DL will never be able to fly everything from NRT that KE can fly from ICN. Further, ICN is and will be a larger hub than HND or NRT and always will be - plus S. Korea is growing, something that is not happening in Japan. Add in that ICN and Tokyo have similar geographic advantages for transpacific flights and it shouldn't be hard to see the advantage that DL and KE gain by cooperating.

Add in that DL has a partnership with China Eastern and will retain a presence in Tokyo via NRT and HND until HND fully opens for US carriers and DL will suddenly become a major force across the Pacific after nearly a decade of scratching its backside wondering "what will I be when I grow up"

DL's Japan beach market flying is some of its most profitable across the Pacific. Same thing for JL, DL's primary competitor. That flying isn't going anywhere and is not dependent on a hub at NRT. There is some overlap between Korea and Japan interest in those same beach markets so DL and KE can work together to strengthen their presence in those markets and not shrink it.

SEA and DTW will remain primary hubs to connect the US to the largest markets in Asia precisely because there will be US cities that don't have ICN service but do have demand to other parts of Asia. Further, DL doesn't need to share its US-China revenues with KE when there is more than enough demand to carry that traffic on its own metal and then distribute it in China on China Eastern.

DL will grow LAX to Asia because it is a huge local market. LAX-ICN on DL metal is very likely in the near term.

As noted above, DL will also grow LAX to Latin America because it is a huge local market; connections including to/from Asia will happen because routes that support two large local markets (LAX to both Latin America and Asia) can fit together to create connections. KE wants to serve more of Latin America; DL and KE will figure out how to do it between the two of them but don't rule out that KE might want its own metal in some of those markets while DL might want a frequency between ICN and Asia on its own metal.

Too many people have been lulled into a sense of DL's powerlessness to Asia because they haven't done anything for years. That will be changing in the next few years.

commavia wrote:

tlecam wrote:

I'm interested in insights on what this JV does to the competitive landscape of the three major alliances for TPAC. In recent years, SkyTeam seemed to be at a disadvantage (to me anyway) because the other alliances have major anchors on both sides of the ocean - OneWOrld has AA/JAL and Star has UA/ANA. Now with DL/KE, what are some changes that we could see in the next 3-5 years?

From my perspective, what we'll see in the next five years in the same natural evolution that we've seen in the last five.

Delta will continue its steady drawdown of NRT and the center of gravity for Delta (and SkyTeam) across the Pacific will shift, finally and permanently, to ICN. The reorientation of the Delta-Korean network around gateways at ATL, DTW, LAX and SEA will provide extensive connectivity between markets deep within the U.S. and markets deep in Asia. And I'm sure Delta will also, to the extent it's permitted to do so, continue to deepen its separate "strategic alliance" with China Eastern - although I still believe Delta and China Eastern/PVG will be firmly a China story, as opposed to an Asia, story, due to all the oft-discussed challenges and shortcomings that come with PVG as a connecting hub.

The United/ANA JV will continue its unmatched position as the leading (and in some ways, arguably dominant) competitive force between the U.S. and the principle cities of East Asia. United will continue to leverage the combination of platform (787) and place (SFO) to offer unrivaled nonstop access from a U.S. gateway hub into Asia. I will say, though, that at this point there aren't a whole lot more places I could plausibly see ANA growing in the U.S. out of NRT, or see United growing in East Asia out of SFO. There are some gaps, but this network is already pretty dense.

And in the case of AA/JAL, I think it will be interesting to see what happens when JAL resumes meaningful longhaul growth. Here, too, though, I don't realistically see a whole lot more major growth. I could imagine AA plausibly adding another few nonstop flights from the U.S. to Asia - routes like LAX-ICN - but not much. AA has already done most of what it needs to do to build a nonstop Asia network broadly competitive with Delta. As for JAL, it's a similar story - I could see a few more U.S. 787 routes, like SEA, and maybe PDX and a few others, but not much. Outside the oneworld JV, I don't think AA's new "strategic alliance" with China Southern will lead to any significant new AA growth to China other than finally starting LAX-PEK and bolstering AA's access beyond PEK/PVG into China.

the biggest obstacle that AA/JL and UA/NH have in competing across the Pacific is the NRT/HND airport fiasco. Trying to build NRT was a strategic failure by the Japanese government that played out as the Japanese economy shrunk and lower cost competitors in Asia including in S. Korea grew their own airline hubs at airports that were globally larger and growing. The Japanese government is in a long process of trying to make HND a viable transpacific hub but can't fully open it which means that HND to US flights will be limited for several more years.

atl100million wrote:

Since DL is the 2nd largest airline across the Pacific and KE is the 3rd largest, the JV will most certainly change the dynamics of transpacific air transportation. Taking 2 airlines that didn't want to look at each other and now have them work very closely together creates enormous potential.

Unquestionably.

atl100million wrote:

retain a presence in Tokyo via NRT and HND until HND fully opens for US carriers

HND won't be "fully [open] for U.S. carriers" anytime soon. Delta's public complaints aside, Delta's management knows this.

atl100million wrote:

DL will suddenly become a major force across the Pacific after nearly a decade of scratching its backside wondering "what will I be when I grow up"

Delta won't "suddenly" become a "major force across the Pacific" - Delta already is a major transpacific competitor.

atl100million wrote:

DL's Japan beach market flying is some of its most profitable across the Pacific. Same thing for JL, DL's primary competitor. That flying isn't going anywhere and is not dependent on a hub at NRT.

I remain highly skeptical. Delta's Japan beach market flying is near-entirely Japan O&D, and the relevance of Delta for Japan O&D in beach markets is correlated with Delta's relevance for Japan O&D overall. As Delta continues drawing down its nonstop offerings from Japan, and the gap relative to bigger, stronger competitors continues to widen, I fully expect Delta's yields in these markets will erode. And that's before even considering the inevitable entrance of lower-cost operators like Jetstar, et al into these markets, which is only going to further undermine the economics of these routes for a U.S. carrier with (by then, likely) a comparatively minimal presence in Japan. We'll see.

atl100million wrote:

Too many people have been lulled into a sense of DL's powerlessness to Asia because they haven't done anything for years. That will be changing in the next few years.

Nobody serious has been "lulled" into a sense of anything. Some people just aren't Delta fanboys. There's a difference.

atl100million wrote:

As noted above, DL will also grow LAX to Latin America because it is a huge local market; connections including to/from Asia will happen because routes that support two large local markets (LAX to both Latin America and Asia) can fit together to create connections. KE wants to serve more of Latin America; DL and KE will figure out how to do it between the two of them but don't rule out that KE might want its own metal in some of those markets while DL might want a frequency between ICN and Asia on its own metal.

While I'm sure DL/KE will offer Asia-Latam connections via LAX, I would not underestimate the potential of MEX to do an even better job. With DL owning 49% of Aeromexico and with MEX being able to facilitate visa-free Latam transit connections (unlike US airports) - Asia-Latam via MEX make a lot of sense.

atl100million wrote:

As noted above, DL will also grow LAX to Latin America because it is a huge local market; connections including to/from Asia will happen because routes that support two large local markets (LAX to both Latin America and Asia) can fit together to create connections. KE wants to serve more of Latin America; DL and KE will figure out how to do it between the two of them but don't rule out that KE might want its own metal in some of those markets while DL might want a frequency between ICN and Asia on its own metal.

Return of ICN - LAX - GRU on KE for example

commavia wrote:

The United/ANA JV will continue its unmatched position as the leading (and in some ways, arguably dominant) competitive force between the U.S. and the principle cities of East Asia.

Dominant? Look at the level of international traffic out of UA hub cities on foreign carriers (and then subtract other U.S. carriers' share).

https://www.transportation.gov/sites/do ... e-2016.pdf

The total U.S. carrier share of international traffic at SFO is only 35%.

United is only one of many in TPAC ops.

MIflyer12 wrote:

Dominant? Look at the level of international traffic out of UA hub cities on foreign carriers (and then subtract other U.S. carriers' share).

https://www.transportation.gov/sites/do ... e-2016.pdf

The total U.S. carrier share of international traffic at SFO is only 35%.

United is only one of many in TPAC ops.

Yes. "Dominant." Notice that small but critical caveat in my original statement - "in some ways." In some ways, United (and more broadly the United/ANA JV) is arguably dominant.

Close reading is always helpful.

I think this JV puts Delta in the driver seat across the Pacific because they have much more upside potential relative to United or American. This momentum and more reliance on Korean metal will continue with more urgency the shift for most US airline metal to be relegated to the top 5 Asian cities from multiple non-stop routings; Not only from hubs but from secondary cities in the future.

WPvsMW wrote:

I think DL may take over LAX/GRU from KE as part of the JV changes. KE downgauged that stage from a B773 to an A332 in 2015, and LF has been iffy (seats are easy to book w/ short lead times). WRT S.Am. routes, I think DL will try to make LAX its version of AA in MIA. IOW, I think DL's expansion of LAX is as much about S.Am. as it is about TPAC, as in playing the DXB Great Circle card S.Am/NE Asia. This expansion wouldn't require 5th Freedom rights for DL but could provide huge feed for the TPAC JV. Poetic justice in the ME3 context.

To paraphrase Lloyd Bentsen (remember him?), "I know Miami. Miami is an airport I use. And Los Angeles is no Miami".

It would be difficult to make LAX anything approaching Miami for South American travel, simply because travel times (i.e., distance) between LAX and any South American city would be almost twice the length of travel from MIA; even JFK is closer than LAX from South America's capitals. Most people don't realize how far east the South American Continent is, compared to North America.

While DL may be able to cherry-pick a few routes (and GRU would be the top of the list) from LAX that might show a profit, there aren't many. Even South Americas powerhouse-of-an-airline, LATAM, only serves two cities (LIM and SCL) from California. ATL is better than LAX, and Delta owns Atlanta.

alfa164 wrote:

It would be difficult to make LAX anything approaching Miami for South American travel, simply because travel times (i.e., distance) between LAX and any South American city would be almost twice the length of travel from MIA; even JFK is closer than LAX from South America's capitals. Most people don't realize how far east the South American Continent is, compared to North America.

While DL may be able to cherry-pick a few routes (and GRU would be the top of the list) from LAX that might show a profit, there aren't many. Even South Americas powerhouse-of-an-airline, LATAM, only serves two cities (LIM and SCL) from California. ATL is better than LAX, and Delta owns Atlanta.

I don't think there's much realistic potential for Delta in the LAX-South America market - better to focus any Asia-South America connections over ATL, DTW or JFK. The LAX-South America market is probably best left to the competitors with a structural advantage there, and that's AA, Avianca and LATAM. Much more attractive a prospect is LAX-Central America but, of course, there Delta already pretty much serves all the relevant markets where it would have a shot at profitability - SAL, GUA and SJO, plus leisure-oriented LIR and BZE. Beyond that, and of course the dense coverage of Mexico together with Aeromexico, the only obvious gap is PTY but I can't see Delta succeeding up against Copa's dominance.

commavia wrote:

alfa164 wrote:

It would be difficult to make LAX anything approaching Miami for South American travel, simply because travel times (i.e., distance) between LAX and any South American city would be almost twice the length of travel from MIA; even JFK is closer than LAX from South America's capitals. Most people don't realize how far east the South American Continent is, compared to North America.

While DL may be able to cherry-pick a few routes (and GRU would be the top of the list) from LAX that might show a profit, there aren't many. Even South Americas powerhouse-of-an-airline, LATAM, only serves two cities (LIM and SCL) from California. ATL is better than LAX, and Delta owns Atlanta.

I don't think there's much realistic potential for Delta in the LAX-South America market - better to focus any Asia-South America connections over ATL, DTW or JFK. The LAX-South America market is probably best left to the competitors with a structural advantage there, and that's AA, Avianca and LATAM. Much more attractive a prospect is LAX-Central America but, of course, there Delta already pretty much serves all the relevant markets where it would have a shot at profitability - SAL, GUA and SJO, plus leisure-oriented LIR and BZE. Beyond that, and of course the dense coverage of Mexico together with Aeromexico, the only obvious gap is PTY but I can't see Delta succeeding up against Copa's dominance.

Also, it's not like a double-connect is required. Just take DL or KE from ICN to ATL, then to SA.

commavia wrote:

alfa164 wrote:

It would be difficult to make LAX anything approaching Miami for South American travel, simply because travel times (i.e., distance) between LAX and any South American city would be almost twice the length of travel from MIA; even JFK is closer than LAX from South America's capitals. Most people don't realize how far east the South American Continent is, compared to North America.

While DL may be able to cherry-pick a few routes (and GRU would be the top of the list) from LAX that might show a profit, there aren't many. Even South Americas powerhouse-of-an-airline, LATAM, only serves two cities (LIM and SCL) from California. ATL is better than LAX, and Delta owns Atlanta.

I don't think there's much realistic potential for Delta in the LAX-South America market - better to focus any Asia-South America connections over ATL, DTW or JFK. The LAX-South America market is probably best left to the competitors with a structural advantage there, and that's AA, Avianca and LATAM. Much more attractive a prospect is LAX-Central America but, of course, there Delta already pretty much serves all the relevant markets where it would have a shot at profitability - SAL, GUA and SJO, plus leisure-oriented LIR and BZE. Beyond that, and of course the dense coverage of Mexico together with Aeromexico, the only obvious gap is PTY but I can't see Delta succeeding up against Copa's dominance.

As I've said before, I believe DL and their 49% ownership of Aeromexico will motivate them to offer a lot of Asia-Latam flows via MEX. MEX is perfectly positioned for many of the top South America to Asia destinations and allows visa-free transit unlike any USA airport. Just check below to see how close many key LATAM desitnations are via MEX versus non-stop:

http://www.gcmap.com/mapui?P=lim-nrt,+lim-mex-nrt = 0.5% difference
http://www.gcmap.com/mapui?P=lim-pvg,+lim-mex-pvg = 0% difference
http://www.gcmap.com/mapui?P=lim-icn,+lim-mex-icn = 0% difference

http://www.gcmap.com/mapui?P=eze-nrt,+eze-mex-nrt = 1.9% difference
http://www.gcmap.com/mapui?P=eze-pvg,+eze-mex-pvg = 3.6% difference
http://www.gcmap.com/mapui?P=eze-icn,+eze-mex-icn = 0% difference

http://www.gcmap.com/mapui?P=scl-nrt,+scl-mex-nrt = 4% difference
http://www.gcmap.com/mapui?P=scl-pvg,+scl-mex-pvg = 3.6% difference
http://www.gcmap.com/mapui?P=scl-icn,+scl-mex-icn = 1.6% difference

http://www.gcmap.com/mapui?P=bog-nrt,+bog-mex-nrt = 1.1% difference
http://www.gcmap.com/mapui?P=bog-pvg,+bog-mex-pvg = 2.4% difference
http://www.gcmap.com/mapui?P=bog-icn,+bog-mex-icn = 2.7% difference

http://www.gcmap.com/mapui?P=gru-nrt,+gru-mex-nrt = 1.1% difference
http://www.gcmap.com/mapui?P=gru-pvg,+gru-mex-pvg = 9.5% difference
http://www.gcmap.com/mapui?P=gru-icn,+gru-mex-icn = 6.7% difference

Given the hot and high situation at MEX, which planes can do ICN-MEX without penalties? It's clocking in at what? 7500 miles?

tlecam wrote:

Given the hot and high situation at MEX, which planes can do ICN-MEX without penalties? It's clocking in at what? 7500 miles?

ICN-MEX shouldn't have problems. MEX-ICN will stop over at MTY when AM starts the route next month with the 787-8.

commavia wrote:

tlecam wrote:

I'm interested in insights on what this JV does to the competitive landscape of the three major alliances for TPAC. In recent years, SkyTeam seemed to be at a disadvantage (to me anyway) because the other alliances have major anchors on both sides of the ocean - OneWOrld has AA/JAL and Star has UA/ANA. Now with DL/KE, what are some changes that we could see in the next 3-5 years?

From my perspective, what we'll see in the next five years in the same natural evolution that we've seen in the last five.

Delta will continue its steady drawdown of NRT and the center of gravity for Delta (and SkyTeam) across the Pacific will shift, finally and permanently, to ICN. The reorientation of the Delta-Korean network around gateways at ATL, DTW, LAX and SEA will provide extensive connectivity between markets deep within the U.S. and markets deep in Asia. And I'm sure Delta will also, to the extent it's permitted to do so, continue to deepen its separate "strategic alliance" with China Eastern - although I still believe Delta and China Eastern/PVG will be firmly a China story, as opposed to an Asia, story, due to all the oft-discussed challenges and shortcomings that come with PVG as a connecting hub.

The United/ANA JV will continue its unmatched position as the leading (and in some ways, arguably dominant) competitive force between the U.S. and the principle cities of East Asia. United will continue to leverage the combination of platform (787) and place (SFO) to offer unrivaled nonstop access from a U.S. gateway hub into Asia. I will say, though, that at this point there aren't a whole lot more places I could plausibly see ANA growing in the U.S. out of NRT, or see United growing in East Asia out of SFO. There are some gaps, but this network is already pretty dense.

And in the case of AA/JAL, I think it will be interesting to see what happens when JAL resumes meaningful longhaul growth. Here, too, though, I don't realistically see a whole lot more major growth. I could imagine AA plausibly adding another few nonstop flights from the U.S. to Asia - routes like LAX-ICN - but not much. AA has already done most of what it needs to do to build a nonstop Asia network broadly competitive with Delta. As for JAL, it's a similar story - I could see a few more U.S. 787 routes, like SEA, and maybe PDX and a few others, but not much. Outside the oneworld JV, I don't think AA's new "strategic alliance" with China Southern will lead to any significant new AA growth to China other than finally starting LAX-PEK and bolstering AA's access beyond PEK/PVG into China.

I think that SEA and ATL will move forward as Asian gateways as Detroit kind of falls to the weigh side with this deal. We see that first of all with both SEA and ATL having double daily and Delta bringing Atlanta to double daily in anticipation of the JV Another good indication of that is the big capacity reduction coming up this fall in the Detroit market with no plans what's so ever to make that up other than flow that lost capacity over SEA and ATL One would of thought that if DTW played a bigger role in Delta's Asian plans a second flight from Delta or the addition of KE service at Detroit would have materialized in anticipation of the JV but that fifn't happen they added Atlanta capacity on the ATL-ICN route meaning they are moving the focus to Asia there rather than over DTW or as everyone is suggesting MSP.

klm617 wrote:

commavia wrote:

tlecam wrote:

I'm interested in insights on what this JV does to the competitive landscape of the three major alliances for TPAC. In recent years, SkyTeam seemed to be at a disadvantage (to me anyway) because the other alliances have major anchors on both sides of the ocean - OneWOrld has AA/JAL and Star has UA/ANA. Now with DL/KE, what are some changes that we could see in the next 3-5 years?

From my perspective, what we'll see in the next five years in the same natural evolution that we've seen in the last five.

Delta will continue its steady drawdown of NRT and the center of gravity for Delta (and SkyTeam) across the Pacific will shift, finally and permanently, to ICN. The reorientation of the Delta-Korean network around gateways at ATL, DTW, LAX and SEA will provide extensive connectivity between markets deep within the U.S. and markets deep in Asia. And I'm sure Delta will also, to the extent it's permitted to do so, continue to deepen its separate "strategic alliance" with China Eastern - although I still believe Delta and China Eastern/PVG will be firmly a China story, as opposed to an Asia, story, due to all the oft-discussed challenges and shortcomings that come with PVG as a connecting hub.

The United/ANA JV will continue its unmatched position as the leading (and in some ways, arguably dominant) competitive force between the U.S. and the principle cities of East Asia. United will continue to leverage the combination of platform (787) and place (SFO) to offer unrivaled nonstop access from a U.S. gateway hub into Asia. I will say, though, that at this point there aren't a whole lot more places I could plausibly see ANA growing in the U.S. out of NRT, or see United growing in East Asia out of SFO. There are some gaps, but this network is already pretty dense.

And in the case of AA/JAL, I think it will be interesting to see what happens when JAL resumes meaningful longhaul growth. Here, too, though, I don't realistically see a whole lot more major growth. I could imagine AA plausibly adding another few nonstop flights from the U.S. to Asia - routes like LAX-ICN - but not much. AA has already done most of what it needs to do to build a nonstop Asia network broadly competitive with Delta. As for JAL, it's a similar story - I could see a few more U.S. 787 routes, like SEA, and maybe PDX and a few others, but not much. Outside the oneworld JV, I don't think AA's new "strategic alliance" with China Southern will lead to any significant new AA growth to China other than finally starting LAX-PEK and bolstering AA's access beyond PEK/PVG into China.

I think that SEA and ATL will move forward as Asian gateways as Detroit kind of falls to the weigh side with this deal. We see that first of all with both SEA and ATL having double daily and Delta bringing Atlanta to double daily in anticipation of the JV Another good indication of that is the big capacity reduction coming up this fall in the Detroit market with no plans what's so ever to make that up other than flow that lost capacity over SEA and ATL One would of thought that if DTW played a bigger role in Delta's Asian plans a second flight from Delta or the addition of KE service at Detroit would have materialized in anticipation of the JV but that fifn't happen they added Atlanta capacity on the ATL-ICN route meaning they are moving the focus to Asia there rather than over DTW or as everyone is suggesting MSP.

I still think DTW will get a 2nd ICN flight either on DL or KE metal, most likely a 777 and NGO will be gone, that's the sacrifice DTW will have to have if another ICN flight is going to DTW because I really don't believe the market can support another ICN flight and NGO. That 332 can be used on something so much better, I mean DL pulled the 332 to PEK.

flymco753 wrote:

klm617 wrote:

commavia wrote:

From my perspective, what we'll see in the next five years in the same natural evolution that we've seen in the last five.

Delta will continue its steady drawdown of NRT and the center of gravity for Delta (and SkyTeam) across the Pacific will shift, finally and permanently, to ICN. The reorientation of the Delta-Korean network around gateways at ATL, DTW, LAX and SEA will provide extensive connectivity between markets deep within the U.S. and markets deep in Asia. And I'm sure Delta will also, to the extent it's permitted to do so, continue to deepen its separate "strategic alliance" with China Eastern - although I still believe Delta and China Eastern/PVG will be firmly a China story, as opposed to an Asia, story, due to all the oft-discussed challenges and shortcomings that come with PVG as a connecting hub.

The United/ANA JV will continue its unmatched position as the leading (and in some ways, arguably dominant) competitive force between the U.S. and the principle cities of East Asia. United will continue to leverage the combination of platform (787) and place (SFO) to offer unrivaled nonstop access from a U.S. gateway hub into Asia. I will say, though, that at this point there aren't a whole lot more places I could plausibly see ANA growing in the U.S. out of NRT, or see United growing in East Asia out of SFO. There are some gaps, but this network is already pretty dense.

And in the case of AA/JAL, I think it will be interesting to see what happens when JAL resumes meaningful longhaul growth. Here, too, though, I don't realistically see a whole lot more major growth. I could imagine AA plausibly adding another few nonstop flights from the U.S. to Asia - routes like LAX-ICN - but not much. AA has already done most of what it needs to do to build a nonstop Asia network broadly competitive with Delta. As for JAL, it's a similar story - I could see a few more U.S. 787 routes, like SEA, and maybe PDX and a few others, but not much. Outside the oneworld JV, I don't think AA's new "strategic alliance" with China Southern will lead to any significant new AA growth to China other than finally starting LAX-PEK and bolstering AA's access beyond PEK/PVG into China.

I think that SEA and ATL will move forward as Asian gateways as Detroit kind of falls to the weigh side with this deal. We see that first of all with both SEA and ATL having double daily and Delta bringing Atlanta to double daily in anticipation of the JV Another good indication of that is the big capacity reduction coming up this fall in the Detroit market with no plans what's so ever to make that up other than flow that lost capacity over SEA and ATL One would of thought that if DTW played a bigger role in Delta's Asian plans a second flight from Delta or the addition of KE service at Detroit would have materialized in anticipation of the JV but that fifn't happen they added Atlanta capacity on the ATL-ICN route meaning they are moving the focus to Asia there rather than over DTW or as everyone is suggesting MSP.

I still think DTW will get a 2nd ICN flight either on DL or KE metal, most likely a 777 and NGO will be gone, that's the sacrifice DTW will have to have if another ICN flight is going to DTW because I really don't believe the market can support another ICN flight and NGO. That 332 can be used on something so much better, I mean DL pulled the 332 to PEK.

I disagree. I think NGO will stay (if its stayed through the big cuts in the past few years, it's probably safe). ICN adds will be to DL hubs and focus cities before we start seeing double dailies to DTW (clearly could be wrong though). I suspect BOS next, then MSP. Maybe SLC at some point (NRT was started at the beginning of the end of NRT hub). I also think DL will start LAX-ICN. The biggest question mark, to me, is PDX - does it stay NRT or switch to ICN?

In light of the speculation of new additions such as BOS or MSP, I might just throw this wild card out there that I was thinking about. SJC-ICN? Tech industry, decent population area that wouldn't want to make the drive all the way to SFO.

As for DTW-NGO, I have a hard time seeing it getting cut.

jbs2886 wrote:

flymco753 wrote:

klm617 wrote:

I think that SEA and ATL will move forward as Asian gateways as Detroit kind of falls to the weigh side with this deal. We see that first of all with both SEA and ATL having double daily and Delta bringing Atlanta to double daily in anticipation of the JV Another good indication of that is the big capacity reduction coming up this fall in the Detroit market with no plans what's so ever to make that up other than flow that lost capacity over SEA and ATL One would of thought that if DTW played a bigger role in Delta's Asian plans a second flight from Delta or the addition of KE service at Detroit would have materialized in anticipation of the JV but that fifn't happen they added Atlanta capacity on the ATL-ICN route meaning they are moving the focus to Asia there rather than over DTW or as everyone is suggesting MSP.

I still think DTW will get a 2nd ICN flight either on DL or KE metal, most likely a 777 and NGO will be gone, that's the sacrifice DTW will have to have if another ICN flight is going to DTW because I really don't believe the market can support another ICN flight and NGO. That 332 can be used on something so much better, I mean DL pulled the 332 to PEK.

I disagree. I think NGO will stay (if its stayed through the big cuts in the past few years, it's probably safe). ICN adds will be to DL hubs and focus cities before we start seeing double dailies to DTW (clearly could be wrong though). I suspect BOS next, then MSP. Maybe SLC at some point (NRT was started at the beginning of the end of NRT hub). I also think DL will start LAX-ICN. The biggest question mark, to me, is PDX - does it stay NRT or switch to ICN?

Would make tons more sense to start ICN on DL metal, a 76W at that.

flymco753 wrote:

jbs2886 wrote:

flymco753 wrote:

I still think DTW will get a 2nd ICN flight either on DL or KE metal, most likely a 777 and NGO will be gone, that's the sacrifice DTW will have to have if another ICN flight is going to DTW because I really don't believe the market can support another ICN flight and NGO. That 332 can be used on something so much better, I mean DL pulled the 332 to PEK.

I disagree. I think NGO will stay (if its stayed through the big cuts in the past few years, it's probably safe). ICN adds will be to DL hubs and focus cities before we start seeing double dailies to DTW (clearly could be wrong though). I suspect BOS next, then MSP. Maybe SLC at some point (NRT was started at the beginning of the end of NRT hub). I also think DL will start LAX-ICN. The biggest question mark, to me, is PDX - does it stay NRT or switch to ICN?

Would make tons more sense to start ICN on DL metal, a 76W at that.

From where?

Yeah unless the auto companies go bankrupt, DTW-NGO isn't going away. Right now, DTW-NGO fluctuates from four times a week during the winter and five times a week during the summer. Maybe Delta replaces the A330-200, which is stretched close to its limit, with the A350-900 and drops frequency to thrice weekly in order to keep capacity flat. I suspect BOS-ICN will start on KE metal with the 787-9. I think there is definitely a possibility that Delta starts a JFK-ICN frequency using the A350-900, even with KE and OZ flying double daily A380s respectively. NYC-ICN is a much larger market than NYC-TYO. Ditto for LAX-ICN. Someone can correct me here, but I believe Delta is required to use the 777 equipment, due to DOT's strict rules for awarding the route, on MSP-HND but that changes in a couple of years. The A330-200 is the appropriate sized aircraft for the route, and its more than likely MSP-HND/ICN, both operated by the A330-200, will happen sooner versus later. Despite all the cuts, PDX-NRT has stayed, largely since TYO is the biggest international market for PDX and Delta does not want to cede that over to ANA. With Delta flying a seasonal PDX-LHR, it seems likely they would be willing to try PDX-ICN, using a 767. As long as either JAL or ANA stay away from launching PDX-NRT, Delta will keep flying it. However, I suspect if ANA starts the route or JAL in the coming years, Delta will immediately drop it. NRT-SPN/GUM/ROR are probably safer than HNL-Japan. As KE already flies HNL-NRT, the coming LCCs on HNL-Japan, and the eventual start of ANA A380 service on HNL-TYO, Delta may end up finding itself having the pull out. Hell they went from double daily 747s and one A330-300 on HNL-NRT five years ago to a single 767 throughout most of the year. With the KE JV and ANA's A380s, makes little sense to keep this market.

Anyway NRT-MNL/PVG/SIN are likely gone by the end of next year with NRT-PVG going first then NRT-MNL and finally NRT-SIN. I'd wager NRT-PVG will go to LAX-PEK, even with AA eventually launching service once they receive proper slot times. Delta wants more LAX-Asia as SEA is constrained and ATL-PVG failed in the past not due to improper equipment but rather Delta could not fill the plane, even twice weekly. Delta will funnel traffic to SE Asia, including MNL, BKK, and SIN, through ICN. I do think eventually Delta will consider a nonstop flight to SIN, still think LAX-SIN is more likely than SEA-SIN even with SQ/UA since the market is several times larger, but not in the near future.

WPvsMW wrote:

I think DL may take over LAX/GRU from KE as part of the JV changes.

Sure... if KE hadn't dropped that route a year ago.

jbs2886 wrote:

flymco753 wrote:

jbs2886 wrote:

I disagree. I think NGO will stay (if its stayed through the big cuts in the past few years, it's probably safe). ICN adds will be to DL hubs and focus cities before we start seeing double dailies to DTW (clearly could be wrong though). I suspect BOS next, then MSP. Maybe SLC at some point (NRT was started at the beginning of the end of NRT hub). I also think DL will start LAX-ICN. The biggest question mark, to me, is PDX - does it stay NRT or switch to ICN?

Would make tons more sense to start ICN on DL metal, a 76W at that.

From where?

PDX, but that's just my opinion.

As for the size of the DL-KE JV vs. AA and UA’s JVs, routes between the US and China cannot be part of US carrier joint ventures. Excluding China and HKG from AA, DL, and UA’s route systems, DL flies 80% of the seats from the US to Asia that UA does. AA’s N. Pacific route system is 50% to/from China and 41% of the size of DL’s non-China N. Pacific route system and 32% the size of UA’s. KE is actually the largest carrier across the Pacific if routes to China are excluded. UA’s JV partners offer more transpacific capacity than UA to non-China. Combining AA and UA’s non-China capacity with its current joint venture partners compared to DL non-China plus KE results in the UA JV offering approx.. 11,000 seats/day each way with DL plus KE operating 9400 (or approx. 85% of what the UA JV offers) while AA/JL offer approx. 7100 seats/day.
The DL/KE JV joins two airlines that have both been smaller than the AA and UA JVs. DL/KE very much puts the two into a different league in terms of size and puts it much closer to being comparable in size to the UA JV and a viable challenge to their dominance.

I agree that DL and KE both have much more growth potential in developing their own transpacific route systems and in putting it all together than either AA or UA. AA is close to getting up to its 5 Asia destinations from ORD, LAX and DFW – and then what? UA is already adding secondary Asia cities from SFO but there aren’t a huge number of additional routes that they are missing.

DTW-HND like DTW-GRU is a niche international market that exists to serve the auto industry and it doesn’t even operate on a daily basis. It isn’t going anywhere.

It is virtually a given that PDX-NRT will switch to PDX-ICN under the JV and can still operate with the 767 for the near future.

DTW-PEK is moving from a 332 to an A350 so it is a DTW-Asia upgrade. We haven’t seen the full plan for DTW-Asia but it is certain that the A350 will make some additional routes work along with the 777 which is still planned for DTW-PVG. ATL is getting the ICN flight but I am not sure they will get much else. DL could well want to put one of its own flights on JFK-ICN so it can return to the NYC-Asia nonstop market.

DL’s interest in LAX to Latin America is in part because DL doesn’t have a Texas hub which helps serve the western US to Asia. LAX to Latin America works because of the huge local market; DL has as much of an advantage with a strong LAX hub as any carrier in Latin America has. Asia-Latin America via LAX is just as much of a byproduct of routes to two regions as AA does at DFW; it is not a goal in itself but both can succeed on their own. AM might be able to flow some traffic from Asia to Latin America via MEX. KE would not participate in a routing via MEX. The DL-AM JV does not currently include Asia and the DL-KE JV does not include Latin America. While DL does a good job of trying to get its partners to work together, DL is in the best position to benefit on its own from the growth of LAX to Latin America and to Asia. DL could help KE fill its flight to GRU if they choose to return to LAX-GRU but it cannot be part of the JV because US carriers cannot have JVs to/from Brazil.

atl100million wrote:

DTW-HND like DTW-GRU is a niche international market that exists to serve the auto industry and it doesn’t even operate on a daily basis. It isn’t going anywhere..

I think you mean "DTW-NGO... is a niche..." ... right?

atl100million wrote:

I agree that DL and KE both have much more growth potential in developing their own transpacific route systems and in putting it all together than either AA or UA. AA is close to getting up to its 5 Asia destinations from ORD, LAX and DFW – and then what? UA is already adding secondary Asia cities from SFO but there aren’t a huge number of additional routes that they are missing.

I'm not really sure how, specifically, people envision that Delta and Korean have "much more growth potential" across the Pacific than United/ANA and AA/JAL. I can certainly see some plausible, near- to mid-term growth potential for Delta/Korean, with logical, surgical adds like, say, Korean on BOS-ICN and Delta on MSP-ICN, maybe some shifting around of the capacity distribution among the two airlines between ICN and the U.S. hubs, etc. But I guess I'm missing all this alleged growth potential that's supposedly so obvious to some others, and I'd be curious to know what, specifically, people expect Delta/Korean to add. In any event, I still - personally - believe that much of the capacity "growth" by the Delta/Korean JV between the U.S. and Korea is going to really just be a net shifting of capacity out of Japan.

atl100million wrote:

It is virtually a given that PDX-NRT will switch to PDX-ICN under the JV and can still operate with the 767 for the near future.

Another one of those "virtual givens." Okay. I don't think it's "virtually a given" at all that PDX-NRT shifts to PDX-ICN. I think there's certainly a chance that happens, but I think there is just as much a chance that Delta simply exits the PDX-Asia market altogether and one of the Japanese carriers picks up the market from NRT.

atl100million wrote:

DL has as much of an advantage with a strong LAX hub as any carrier in Latin America has.

No it doesn't. In Central America, maybe - although even there, Delta is no match for Copa on LAX-PTY. But to South America? No, Delta does not have "as much of an advantage" as AA, Avianca and Latam. Those three airlines all have structural advantages - relative to Delta - in the LAX-South America market. I'm not saying Delta may not try LAX-South America (again), but I personally suspect it would probably be about as (un)successful as the first attempt.

This is great news and am really happy this is happening.

I am a DL Frequent Flyer based in Tokyo. Knowing I have the KE option for my SE Asia Business and can earn miles is a big deal.

DL can't compete effectively against JL (OW) and NH (Star) in Asia without a strong JVA.
Korean offers great connections throughout Asia and connect it to Japan or via Seoul and it just gets better.

This made my day.

jbs2886 wrote:

I think NGO will stay (if its stayed through the big cuts in the past few years, it's probably safe). ICN adds will be to DL hubs and focus cities before we start seeing double dailies to DTW (clearly could be wrong though). I suspect BOS next, then MSP. Maybe SLC at some point (NRT was started at the beginning of the end of NRT hub). I also think DL will start LAX-ICN. The biggest question mark, to me, is PDX - does it stay NRT or switch to ICN?

DTW-NGO - like PDX-NRT and CVG-CDG - serves a specific purpose; I agree that it will stay. The big question is, "How many flights to NRT will continue to operate?" Despite the JV, and despite to slow-down of the Japanese economy, Tokyo remains by far the largest financial and business center in Asia (outside of China). If the Japanese economy continues to recover, I can see DL keeping most - if not all - of the NRT flights.. at least until more HND slots become available. No airline really wants to give up in a market, because they know someone else will jump in and take it away. Delta in Tokyo is facing that dilemma now; I think they will choose to keep their presence there.

I also think - for much the same reasons - that MNL and SIN will remain. Those, along with the Tokyo-to-the-vacation-islands flight, help keep Delta viable at NRT. And if Delta does continue to draw down NRT, I think there is a distinct possibility the MNL add-on might return to the NGO flight. Even as a marginal market, Delta should want to keep a presence there.

The big advantage of the JV with KE isn't its ability to replace flights to Asia, it is its ability to grow in Asia. There will be growth between the USA and Korea, but not necessarily at the expense of other Asian flying. Eliminating NRT-PVG gives Delta an opportunity to gain another direct flight to China, but eliminating any other routes just abandons a market they may want to continue to serve.

alfa164 wrote:

DTW-NGO - like PDX-NRT and CVG-CDG - serves a specific purpose; I agree that it will stay. The big question is, "How many flights to NRT will continue to operate?" Despite the JV, and despite to slow-down of the Japanese economy, Tokyo remains by far the largest financial and business center in Asia (outside of China). If the Japanese economy continues to recover, I can see DL keeping most - if not all - of the NRT flights.. at least until more HND slots become available. No airline really wants to give up in a market, because they know someone else will jump in and take it away. Delta in Tokyo is facing that dilemma now; I think they will choose to keep their presence there.

I completely agree that, to paraphrase Mark Twain, the reports of the death of Japan's economy, and Japan's role in the global economy, have been greatly exaggerated. Japan is still an absolutely immense economic power, and it's still one of the world's wealthiest societies. And Japan will, unquestionably, continue to be an important market for Delta - as it long has been, and as it will continue to also be for AA and United. But I do think that the proverbial "center of gravity" for Delta (and SkyTeam) in Asia will soon shift permanently and unambiguously to Korea and ICN.

All that said, I also agree that DTW-NGO is, like CVG-CDG, a specialized route tailored to serving specific commercial and corporate linkages, and I don't see it going anywhere with or without a Korean JV. I remain more skeptical, and bearish, about Delta on PDX-NRT. Personally, I still think Delta's PDX-NRT flight is ultimately going to be ended in favor of a Delta or Korean flight to ICN, and/or a Japanese carrier flying PDX-NRT with a 787. I don't necessarily view it as a bad news story for PDX, though - indeed, I could very easily envision, in a few years, PDX actually have a daily nonstop flight to both NRT (again, likely on ANA or JAL) and ICN (again, on Delta or Korean).

alfa164 wrote:

I also think - for much the same reasons - that MNL and SIN will remain. Those, along with the Tokyo-to-the-vacation-islands flight, help keep Delta viable at NRT. And if Delta does continue to draw down NRT, I think there is a distinct possibility the MNL add-on might return to the NGO flight. Even as a marginal market, Delta should want to keep a presence there.

Interesting - had not considered the prospect of the MNL tag being shifting (back) to NGO. That is interesting to consider, as I think it would mark the first time since probably the DC10s on KIX-KUL/KHH that a Delta/Northwest 5th freedom market in Asia was flown solely from somewhere other than NRT. Personally, though, I still expect that much if not all of Delta's beyond-Japan flying - including NRT-Asia and the beach markets - will be gone within 3-5 years of the Korean JV going into effect. I think Japan will become largely a spoke for Delta, with some connections still offered with SkyTeam partners over NRT. And here, too, I don't really view that as a negative - for Delta or Japan. It's the natural evolution of the market - the Japanese carriers (ANA and JAL, and the emergent low fare carriers like JetStar) will solidify their dominance of their home market, and Delta will optimize and orient its Asia network towards South Korea and its Korean JV. Win-win.

dmorbust wrote:

While I'm sure DL/KE will offer Asia-Latam connections via LAX, I would not underestimate the potential of MEX to do an even better job. With DL owning 49% of Aeromexico and with MEX being able to facilitate visa-free Latam transit connections (unlike US airports) - Asia-Latam via MEX make a lot of sense.

hoons90 wrote:

ICN-MEX shouldn't have problems. MEX-ICN will stop over at MTY when AM starts the route next month with the 787-8.

While AM will be able to offer very good connections to NRT from Central and South America, the intermediate stop at MTY and TIJ on the MEX-ICN and MEX-PVG flights, respectively, makes one-stop service impossible. This and the fact that DL's joint operation agreement with AM does not include South America, make me think that DL will mostly encourage GRU-DTW-Asia, South America-ATL-ICN/NRT, and South America-JFK-ICN connections. For South Americans looking at possible SkyTeam routings involving cities such as PEK, HKG, TPE and cities in Southeast Asia, perhaps AF-KL will be a more interesting alternative so as to avoid two stopovers.

klm617 wrote:

ElroyJetson wrote:

LAX772LR wrote:

Out of curiosity, which such "failed" J/Vs can you name?



If you're talking about DL, then that isn't true at all.

Though they eventually transitioned away from them, DL flew several 5th freedom segments under its various TATL J/Vs:
AMS-BOM, CDG-BOM, CDG-MAA, FRA-BOM

There have been many failed JV's. SQ and Virgin Atlantic comes immediately to mind. SQ made a significant financial investment in the JV and admitted after the fact they lost money on the deal and said the JV did not generate the traffic that was expected. Numerous U.S. carriers have attempted JV's with Japanese carriers and many of them have failed.

Frankly, with only 8 U.S. cities with direct flights to ICN I do not see this JV having much of an impact. For example....you need to travel from IND to HKG. Do drive to ORD and take a nonstop flight? Or maybe fly to LAX and then connect nonstop?

Or, do you take DL to back track from IND to DTW.....then to ICN.....then to HKG?

What do you think most pax would prefer?

I'm flying IND-ORD-HKG you are so right and this is where Delta misses the boat even when it comes to Europe causing most of their markets to double connect or back track to ATL because they refuse to add more international flights from any other hub but ATL

Please name one European market served from ATL, but not JFK...

Osubuckeyes wrote:

klm617 wrote:

ElroyJetson wrote:

There have been many failed JV's. SQ and Virgin Atlantic comes immediately to mind. SQ made a significant financial investment in the JV and admitted after the fact they lost money on the deal and said the JV did not generate the traffic that was expected. Numerous U.S. carriers have attempted JV's with Japanese carriers and many of them have failed.

Frankly, with only 8 U.S. cities with direct flights to ICN I do not see this JV having much of an impact. For example....you need to travel from IND to HKG. Do drive to ORD and take a nonstop flight? Or maybe fly to LAX and then connect nonstop?

Or, do you take DL to back track from IND to DTW.....then to ICN.....then to HKG?

What do you think most pax would prefer?

I'm flying IND-ORD-HKG you are so right and this is where Delta misses the boat even when it comes to Europe causing most of their markets to double connect or back track to ATL because they refuse to add more international flights from any other hub but ATL

Please name one European market served from ATL, but not JFK...

Stuttgart. But either way, you have to ignore klm617, he doesn't speak in facts, although I tend to fall into the trap of responding.

I have been following this and other conversions on Airliners.net since it's inception- but I normally lurk.

However this thread strikes a nerve with me as I read commentary about the potential or lack thereof of the KE/DL JV.

I spent a signification portion of my career involved in actually "putting butts in seats." And based upon my own airline marketing/sales background, two important factors in the KE/DL JV are being neglected in this discussion. They are both strong suits of DL- and will help bring it's success.

1. Corporate sales agreements:

The true profitability of a TPAC or TATL flight is derived from the front cabin in these markets. Both NW and then DL have highly refined relationships (as do OAL's) with the major corporate producers nation-wide of high-yield INT'L traffic. The aggregate traffic generated through agreements between corporate travel departments and an airline can and does have significant effect on the success of current and future routes. A Corporate Agreement will trump elapsed time on a city pair, thus potentially shifting traffic off a faster connection. And this JV will significantly improve connecting opportunities for any signed agreement between numerous city pairs, just as the KL/NW JV did 20 years ago. Corporate sales agreements helped NW ultimately build 4-5 daily flights between DTWAMS- with high-yield Business Class traffic. The traffic filling those flights had nothing to do with the Wayne County Airport Authority "pitching" NW. If I was still a airline corporate sales manager, I would be salivating over this opportunity!!

2. Consolidators:

Consolidators who ticket ethnic traffic between North America and Asia are strong secondary producers of traffic that can help level L/F's and revenue. While yields are not always wonderful, they provide a revenue base than can take the heat off a city pair when corporate travel slackens during holiday periods. NW had nearly 60 years of relationships with these folks. And this has been carried on to DL. I personally can attest that relationships with ethnic consolidators can move or protect market share. (all other things being equal) Again, the KE/DL JV will be supported by this important market, with numerous new connecting opportunities and departure cities on JV flights from cities like SFO,, HNL, IAD, or DFW.

Lastly,

There is significant DEW TPAC traffic that originates beyond current departure cities. The JV strengthens these Asian connecting opportunities for DL via the addition of numerous KE N. American departure points. This traffic is "up for grabs" in the absence of corporate agreements. Fares, schedules, and FFP's influence traffic from the outlier cities. More connecting opportunities from the new new city pairs, along with Corp agreements and Consolidators will funnel additional traffic into existing routes routes and potentially a few new ones. In the next 12-24 months, I believe the additional traffic generated by these Corp Agreements, Consolidators, and new JV connecting opportunities will initially lead to larger AC on current routes from DL & KE markets with strong connecting traffic including LAX, SEA, DTW, ATL, and JFK.

beerbus wrote:

I have been following this and other conversions on Airliners.net since it's inception- but I normally lurk.

However this thread strikes a nerve with me as I read commentary about the potential or lack thereof of the KE/DL JV.

I spent a signification portion of my career involved in actually "putting butts in seats." And based upon my own airline marketing/sales background, two important factors in the KE/DL JV are being neglected in this discussion. They are both strong suits of DL- and will help bring it's success.

1. Corporate sales agreements:

The true profitability of a TPAC or TATL flight is derived from the front cabin in these markets. Both NW and then DL have highly refined relationships (as do OAL's) with the major corporate producers nation-wide of high-yield INT'L traffic. The aggregate traffic generated through agreements between corporate travel departments and an airline can and does have significant effect on the success of current and future routes. A Corporate Agreement will trump elapsed time on a city pair, thus potentially shifting traffic off a faster connection. And this JV will significantly improve connecting opportunities for any signed agreement between numerous city pairs, just as the KL/NW JV did 20 years ago. Corporate sales agreements helped NW ultimately build 4-5 daily flights between DTWAMS- with high-yield Business Class traffic. The traffic filling those flights had nothing to do with the Wayne County Airport Authority "pitching" NW. If I was still a airline corporate sales manager, I would be salivating over this opportunity!!

2. Consolidators:

Consolidators who ticket ethnic traffic between North America and Asia are strong secondary producers of traffic that can help level L/F's and revenue. While yields are not always wonderful, they provide a revenue base than can take the heat off a city pair when corporate travel slackens during holiday periods. NW had nearly 60 years of relationships with these folks. And this has been carried on to DL. I personally can attest that relationships with ethnic consolidators can move or protect market share. (all other things being equal) Again, the KE/DL JV will be supported by this important market, with numerous new connecting opportunities and departure cities on JV flights from cities like SFO,, HNL, IAD, or DFW.

Lastly,

There is significant DEW TPAC traffic that originates beyond current departure cities. The JV strengthens these Asian connecting opportunities for DL via the addition of numerous KE N. American departure points. This traffic is "up for grabs" in the absence of corporate agreements. Fares, schedules, and FFP's influence traffic from the outlier cities. More connecting opportunities from the new new city pairs, along with Corp agreements and Consolidators will funnel additional traffic into existing routes routes and potentially a few new ones. In the next 12-24 months, I believe the additional traffic generated by these Corp Agreements, Consolidators, and new JV connecting opportunities will initially lead to larger AC on current routes from DL & KE markets with strong connecting traffic including LAX, SEA, DTW, ATL, and JFK.

Great post, thank you for contributing. Its hard to respond to the one poster re: DTW, they have a bone to pick and its never based on logic. Adding routes is not favoritism of one hub over another, they are a lot more factors in play and you really went to the heart of it.

beerbus wrote:

I have been following this and other conversions on Airliners.net since it's inception- but I normally lurk.
However this thread strikes a nerve with me as I read commentary about the potential or lack thereof of the KE/DL JV.
I spent a signification portion of my career involved in actually "putting butts in seats." And based upon my own airline marketing/sales background, two important factors in the KE/DL JV are being neglected in this discussion. They are both strong suits of DL- and will help bring it's success.
1. Corporate sales agreements:
The true profitability of a TPAC or TATL flight is derived from the front cabin in these markets. Both NW and then DL have highly refined relationships (as do OAL's) with the major corporate producers nation-wide of high-yield INT'L traffic. The aggregate traffic generated through agreements between corporate travel departments and an airline can and does have significant effect on the success of current and future routes. A Corporate Agreement will trump elapsed time on a city pair, thus potentially shifting traffic off a faster connection. And this JV will significantly improve connecting opportunities for any signed agreement between numerous city pairs, just as the KL/NW JV did 20 years ago. Corporate sales agreements helped NW ultimately build 4-5 daily flights between DTWAMS- with high-yield Business Class traffic. The traffic filling those flights had nothing to do with the Wayne County Airport Authority "pitching" NW. If I was still a airline corporate sales manager, I would be salivating over this opportunity!!
2. Consolidators:
Consolidators who ticket ethnic traffic between North America and Asia are strong secondary producers of traffic that can help level L/F's and revenue. While yields are not always wonderful, they provide a revenue base than can take the heat off a city pair when corporate travel slackens during holiday periods. NW had nearly 60 years of relationships with these folks. And this has been carried on to DL. I personally can attest that relationships with ethnic consolidators can move or protect market share. (all other things being equal) Again, the KE/DL JV will be supported by this important market, with numerous new connecting opportunities and departure cities on JV flights from cities like SFO,, HNL, IAD, or DFW.
Lastly,
There is significant DEW TPAC traffic that originates beyond current departure cities. The JV strengthens these Asian connecting opportunities for DL via the addition of numerous KE N. American departure points. This traffic is "up for grabs" in the absence of corporate agreements. Fares, schedules, and FFP's influence traffic from the outlier cities. More connecting opportunities from the new new city pairs, along with Corp agreements and Consolidators will funnel additional traffic into existing routes routes and potentially a few new ones. In the next 12-24 months, I believe the additional traffic generated by these Corp Agreements, Consolidators, and new JV connecting opportunities will initially lead to larger AC on current routes from DL & KE markets with strong connecting traffic including LAX, SEA, DTW, ATL, and JFK.

Thank you for your contribution! If I am reading you right, you tend to agree that this JV will not result in much diminished service (i.e., XXX-NRT), but is a chance to expand the market significantly.

I would like to ask... how do you think it may affect some specific routes, like PDX-NRT? DTW-NGO (which seems like a prime example of being driven by Corporate Contracts)? DL flights to MNL? And the NRT-holiday destinations flights serving mostly Japanese tourists? Your insight would be appreciated.

And yes, just ignore the infamous DTW troll... the sky is not falling in DTW!

beerbus wrote:

I have been following this and other conversions on Airliners.net since it's inception- but I normally lurk.

However this thread strikes a nerve with me as I read commentary about the potential or lack thereof of the KE/DL JV.

I spent a signification portion of my career involved in actually "putting butts in seats." And based upon my own airline marketing/sales background, two important factors in the KE/DL JV are being neglected in this discussion. They are both strong suits of DL- and will help bring it's success.

1. Corporate sales agreements:

The true profitability of a TPAC or TATL flight is derived from the front cabin in these markets. Both NW and then DL have highly refined relationships (as do OAL's) with the major corporate producers nation-wide of high-yield INT'L traffic. The aggregate traffic generated through agreements between corporate travel departments and an airline can and does have significant effect on the success of current and future routes. A Corporate Agreement will trump elapsed time on a city pair, thus potentially shifting traffic off a faster connection. And this JV will significantly improve connecting opportunities for any signed agreement between numerous city pairs, just as the KL/NW JV did 20 years ago. Corporate sales agreements helped NW ultimately build 4-5 daily flights between DTWAMS- with high-yield Business Class traffic. The traffic filling those flights had nothing to do with the Wayne County Airport Authority "pitching" NW. If I was still a airline corporate sales manager, I would be salivating over this opportunity!!

2. Consolidators:

Consolidators who ticket ethnic traffic between North America and Asia are strong secondary producers of traffic that can help level L/F's and revenue. While yields are not always wonderful, they provide a revenue base than can take the heat off a city pair when corporate travel slackens during holiday periods. NW had nearly 60 years of relationships with these folks. And this has been carried on to DL. I personally can attest that relationships with ethnic consolidators can move or protect market share. (all other things being equal) Again, the KE/DL JV will be supported by this important market, with numerous new connecting opportunities and departure cities on JV flights from cities like SFO,, HNL, IAD, or DFW.

Lastly,

There is significant DEW TPAC traffic that originates beyond current departure cities. The JV strengthens these Asian connecting opportunities for DL via the addition of numerous KE N. American departure points. This traffic is "up for grabs" in the absence of corporate agreements. Fares, schedules, and FFP's influence traffic from the outlier cities. More connecting opportunities from the new new city pairs, along with Corp agreements and Consolidators will funnel additional traffic into existing routes routes and potentially a few new ones. In the next 12-24 months, I believe the additional traffic generated by these Corp Agreements, Consolidators, and new JV connecting opportunities will initially lead to larger AC on current routes from DL & KE markets with strong connecting traffic including LAX, SEA, DTW, ATL, and JFK.

Thanks for making the jump from lurking to contributing.

Osubuckeyes wrote:

klm617 wrote:

ElroyJetson wrote:

There have been many failed JV's. SQ and Virgin Atlantic comes immediately to mind. SQ made a significant financial investment in the JV and admitted after the fact they lost money on the deal and said the JV did not generate the traffic that was expected. Numerous U.S. carriers have attempted JV's with Japanese carriers and many of them have failed.

Frankly, with only 8 U.S. cities with direct flights to ICN I do not see this JV having much of an impact. For example....you need to travel from IND to HKG. Do drive to ORD and take a nonstop flight? Or maybe fly to LAX and then connect nonstop?

Or, do you take DL to back track from IND to DTW.....then to ICN.....then to HKG?

What do you think most pax would prefer?

I'm flying IND-ORD-HKG you are so right and this is where Delta misses the boat even when it comes to Europe causing most of their markets to double connect or back track to ATL because they refuse to add more international flights from any other hub but ATL

.

Please name one European market served from ATL, but not JFK...

There are many markets that have no JFK flights but have multiple flights that serve ATL so just because there is a flight from JFK doesn't mean that market is accessible to it hence ATL being you only option which in most cases involves back tracking

alfa164 wrote:

beerbus wrote:

I have been following this and other conversions on Airliners.net since it's inception- but I normally lurk.
However this thread strikes a nerve with me as I read commentary about the potential or lack thereof of the KE/DL JV.
I spent a signification portion of my career involved in actually "putting butts in seats." And based upon my own airline marketing/sales background, two important factors in the KE/DL JV are being neglected in this discussion. They are both strong suits of DL- and will help bring it's success.
1. Corporate sales agreements:
The true profitability of a TPAC or TATL flight is derived from the front cabin in these markets. Both NW and then DL have highly refined relationships (as do OAL's) with the major corporate producers nation-wide of high-yield INT'L traffic. The aggregate traffic generated through agreements between corporate travel departments and an airline can and does have significant effect on the success of current and future routes. A Corporate Agreement will trump elapsed time on a city pair, thus potentially shifting traffic off a faster connection. And this JV will significantly improve connecting opportunities for any signed agreement between numerous city pairs, just as the KL/NW JV did 20 years ago. Corporate sales agreements helped NW ultimately build 4-5 daily flights between DTWAMS- with high-yield Business Class traffic. The traffic filling those flights had nothing to do with the Wayne County Airport Authority "pitching" NW. If I was still a airline corporate sales manager, I would be salivating over this opportunity!!
2. Consolidators:
Consolidators who ticket ethnic traffic between North America and Asia are strong secondary producers of traffic that can help level L/F's and revenue. While yields are not always wonderful, they provide a revenue base than can take the heat off a city pair when corporate travel slackens during holiday periods. NW had nearly 60 years of relationships with these folks. And this has been carried on to DL. I personally can attest that relationships with ethnic consolidators can move or protect market share. (all other things being equal) Again, the KE/DL JV will be supported by this important market, with numerous new connecting opportunities and departure cities on JV flights from cities like SFO,, HNL, IAD, or DFW.
Lastly,
There is significant DEW TPAC traffic that originates beyond current departure cities. The JV strengthens these Asian connecting opportunities for DL via the addition of numerous KE N. American departure points. This traffic is "up for grabs" in the absence of corporate agreements. Fares, schedules, and FFP's influence traffic from the outlier cities. More connecting opportunities from the new new city pairs, along with Corp agreements and Consolidators will funnel additional traffic into existing routes routes and potentially a few new ones. In the next 12-24 months, I believe the additional traffic generated by these Corp Agreements, Consolidators, and new JV connecting opportunities will initially lead to larger AC on current routes from DL & KE markets with strong connecting traffic including LAX, SEA, DTW, ATL, and JFK.

Thank you for your contribution! If I am reading you right, you tend to agree that this JV will not result in much diminished service (i.e., XXX-NRT), but is a chance to expand the market significantly.

I would like to ask... how do you think it may affect some specific routes, like PDX-NRT? DTW-NGO (which seems like a prime example of being driven by Corporate Contracts)? DL flights to MNL? And the NRT-holiday destinations flights serving mostly Japanese tourists? Your insight would be appreciated.

And yes, just ignore the infamous DTW troll... the sky is not falling in DTW!

It is falling ever so slowly slow enough that most do not see it falling as yourself.

jbs2886 wrote:

beerbus wrote:

I have been following this and other conversions on Airliners.net since it's inception- but I normally lurk.

However this thread strikes a nerve with me as I read commentary about the potential or lack thereof of the KE/DL JV.

I spent a signification portion of my career involved in actually "putting butts in seats." And based upon my own airline marketing/sales background, two important factors in the KE/DL JV are being neglected in this discussion. They are both strong suits of DL- and will help bring it's success.

1. Corporate sales agreements:

The true profitability of a TPAC or TATL flight is derived from the front cabin in these markets. Both NW and then DL have highly refined relationships (as do OAL's) with the major corporate producers nation-wide of high-yield INT'L traffic. The aggregate traffic generated through agreements between corporate travel departments and an airline can and does have significant effect on the success of current and future routes. A Corporate Agreement will trump elapsed time on a city pair, thus potentially shifting traffic off a faster connection. And this JV will significantly improve connecting opportunities for any signed agreement between numerous city pairs, just as the KL/NW JV did 20 years ago. Corporate sales agreements helped NW ultimately build 4-5 daily flights between DTWAMS- with high-yield Business Class traffic. The traffic filling those flights had nothing to do with the Wayne County Airport Authority "pitching" NW. If I was still a airline corporate sales manager, I would be salivating over this opportunity!!

2. Consolidators:

Consolidators who ticket ethnic traffic between North America and Asia are strong secondary producers of traffic that can help level L/F's and revenue. While yields are not always wonderful, they provide a revenue base than can take the heat off a city pair when corporate travel slackens during holiday periods. NW had nearly 60 years of relationships with these folks. And this has been carried on to DL. I personally can attest that relationships with ethnic consolidators can move or protect market share. (all other things being equal) Again, the KE/DL JV will be supported by this important market, with numerous new connecting opportunities and departure cities on JV flights from cities like SFO,, HNL, IAD, or DFW.

Lastly,

There is significant DEW TPAC traffic that originates beyond current departure cities. The JV strengthens these Asian connecting opportunities for DL via the addition of numerous KE N. American departure points. This traffic is "up for grabs" in the absence of corporate agreements. Fares, schedules, and FFP's influence traffic from the outlier cities. More connecting opportunities from the new new city pairs, along with Corp agreements and Consolidators will funnel additional traffic into existing routes routes and potentially a few new ones. In the next 12-24 months, I believe the additional traffic generated by these Corp Agreements, Consolidators, and new JV connecting opportunities will initially lead to larger AC on current routes from DL & KE markets with strong connecting traffic including LAX, SEA, DTW, ATL, and JFK.

Great post, thank you for contributing. Its hard to respond to the one poster re: DTW, they have a bone to pick and its never based on logic. Adding routes is not favoritism of one hub over another, they are a lot more factors in play and you really went to the heart of it.

You think just because you learned it from a book that's how it is. Keep drinking that corporate Kool-Aid

Another point to consider is that KE is not an insignificant player in the Japanese market (a recent exhibit I saw showed KE deriving roughly the same percentage of total revenue from Japan as from China). As Japan is included in the JV, DL's existing Japanese portfolio (beach markets and transpacific) can only be helped by the inclusion of KE's Japanese operation....

commavia wrote:

I'm not really sure how, specifically, people envision that Delta and Korean have "much more growth potential" across the Pacific than United/ANA and AA/JAL. I can certainly see some plausible, near- to mid-term growth potential for Delta/Korean, with logical, surgical adds like, say, Korean on BOS-ICN and Delta on MSP-ICN, maybe some shifting around of the capacity distribution among the two airlines between ICN and the U.S. hubs, etc. But I guess I'm missing all this alleged growth potential that's supposedly so obvious to some others, and I'd be curious to know what, specifically, people expect Delta/Korean to add. In any event, I still - personally - believe that much of the capacity "growth" by the Delta/Korean JV between the U.S. and Korea is going to really just be a net shifting of capacity out of Japan.

They are looking at the fanboy indicator. The only significant indicator here should be the proportion of domestic traffic for each of the US3. In an environment relatively free of regulatory obstruction, one would expect the proportion of traffic connecting on each airline to Asia to be roughly in line with the domestic market share of each airline.

I suspect that AA is the only one of the US3 that is not pulling its weight. Up until the merger, US Airways which had a commanding position in the domestic east did not fly to Asia and was a codeshare partner of United. I suspect that AA is building its Asian network on the strength of much of the traffic it has recaptured from United and others.

As for Delta, Korean pretty much has everything covered. Does Delta have a hub in any Top 10 US gateway city that Korean doesn't already serve? Other than that, one would have to look at the possibility of nonstops from the US to cities in Asia where there is already a significant number of passengers originating in the US and connecting at INC to those cities. But that's not a slam dunk either because one has to imagine that Korean historically has captured that traffic by pricing below the nonstops that already exist from the US gateway cities where it operates.

I don't understand the reasoning behind "Delta will leave the Japan to beach markets". These are mostly Japanese people traveling from Japan to the beaches...with a few connecting people. ...and they have been doing this on Northwest and now Delta for years. It is a built up leisure market and a market that cannot be transferred to Korea. My understanding is that it is a money making market as is the one to Hawaii. I can see building up a "new" beach market from Korea, but that would be Koreans traveling.

I'm sure Delta knows exactly how many people on the US-NRT flights connect in Japan and how many stop in Japan and will maintain the number of flights to retain the "stay in Japan" traffic even if they transfer all the connecting traffic to ICN. How many US gateways that entails I have no clue...maybe they will cut some, but they are down to 5 now so I doubt if more than one will be cut. A Delta/KA joint venture alone will not get people to Japan.

I'm certainly looking forward to the "beyond" ICN flights especially if they get flights back to Bangkok which I fly regularly. I see this JV as a big plus for Delta.

Jim

Thanks for all of the replies. Very interesting thoughts and insights. I'm looking forward to seeing how all of this develops. In particular, I'm interested in how the metal plays out for the routes between DL and KE. Given their roles in the DL network, I wouldn't be surprised if ATL, DTW and SEA all go double daily or at least 10/11/12 flights per week. I'm not sure about MSP, mostly because I don't know what it serves that DTW doesn't and I'm not sure how big the Seoul/MSP market is. I think BOS is likely at some point on a 787, possibly starting at 4x/week.

tlecam wrote:

Thanks for all of the replies. Very interesting thoughts and insights. I'm looking forward to seeing how all of this develops. In particular, I'm interested in how the metal plays out for the routes between DL and KE. Given their roles in the DL network, I wouldn't be surprised if ATL, DTW and SEA all go double daily or at least 10/11/12 flights per week. I'm not sure about MSP, mostly because I don't know what it serves that DTW doesn't and I'm not sure how big the Seoul/MSP market is. I think BOS is likely at some point on a 787, possibly starting at 4x/week.

Well ATL and SEA are both double daily already.

klm617 wrote:

jbs2886 wrote:

beerbus wrote:

I have been following this and other conversions on Airliners.net since it's inception- but I normally lurk.

However this thread strikes a nerve with me as I read commentary about the potential or lack thereof of the KE/DL JV.

I spent a signification portion of my career involved in actually "putting butts in seats." And based upon my own airline marketing/sales background, two important factors in the KE/DL JV are being neglected in this discussion. They are both strong suits of DL- and will help bring it's success.

1. Corporate sales agreements:

The true profitability of a TPAC or TATL flight is derived from the front cabin in these markets. Both NW and then DL have highly refined relationships (as do OAL's) with the major corporate producers nation-wide of high-yield INT'L traffic. The aggregate traffic generated through agreements between corporate travel departments and an airline can and does have significant effect on the success of current and future routes. A Corporate Agreement will trump elapsed time on a city pair, thus potentially shifting traffic off a faster connection. And this JV will significantly improve connecting opportunities for any signed agreement between numerous city pairs, just as the KL/NW JV did 20 years ago. Corporate sales agreements helped NW ultimately build 4-5 daily flights between DTWAMS- with high-yield Business Class traffic. The traffic filling those flights had nothing to do with the Wayne County Airport Authority "pitching" NW. If I was still a airline corporate sales manager, I would be salivating over this opportunity!!

2. Consolidators:

Consolidators who ticket ethnic traffic between North America and Asia are strong secondary producers of traffic that can help level L/F's and revenue. While yields are not always wonderful, they provide a revenue base than can take the heat off a city pair when corporate travel slackens during holiday periods. NW had nearly 60 years of relationships with these folks. And this has been carried on to DL. I personally can attest that relationships with ethnic consolidators can move or protect market share. (all other things being equal) Again, the KE/DL JV will be supported by this important market, with numerous new connecting opportunities and departure cities on JV flights from cities like SFO,, HNL, IAD, or DFW.

Lastly,

There is significant DEW TPAC traffic that originates beyond current departure cities. The JV strengthens these Asian connecting opportunities for DL via the addition of numerous KE N. American departure points. This traffic is "up for grabs" in the absence of corporate agreements. Fares, schedules, and FFP's influence traffic from the outlier cities. More connecting opportunities from the new new city pairs, along with Corp agreements and Consolidators will funnel additional traffic into existing routes routes and potentially a few new ones. In the next 12-24 months, I believe the additional traffic generated by these Corp Agreements, Consolidators, and new JV connecting opportunities will initially lead to larger AC on current routes from DL & KE markets with strong connecting traffic including LAX, SEA, DTW, ATL, and JFK.

Great post, thank you for contributing. Its hard to respond to the one poster re: DTW, they have a bone to pick and its never based on logic. Adding routes is not favoritism of one hub over another, they are a lot more factors in play and you really went to the heart of it.

You think just because you learned it from a book that's how it is. Keep drinking that corporate Kool-Aid

Geezus, you really have some bizarre kind of paranoia that DL is out to get DTW; they hate DTW; and everyone else hates DTW.

Pretty soon DL will be de-hubbing DTW and moving everything to ATL and MSP because they have it out so much for DTW. Make you feel better to hear that so you can go wallow in your imaginary sorrow?

BoeingGuy wrote:

klm617 wrote:

jbs2886 wrote:

Great post, thank you for contributing. Its hard to respond to the one poster re: DTW, they have a bone to pick and its never based on logic. Adding routes is not favoritism of one hub over another, they are a lot more factors in play and you really went to the heart of it.

You think just because you learned it from a book that's how it is. Keep drinking that corporate Kool-Aid

Geezus, you really have some bizarre kind of paranoia that DL is out to get DTW; they hate DTW; and everyone else hates DTW.
Pretty soon DL will be de-hubbing DTW and moving everything to ATL and MSP because they have it out so much for DTW. Make you feel better to hear that so you can go wallow in your imaginary sorrow?

Or de-hub DTW and move everything to Windsor, Ontario... after all, Canada is familiar with loonies already....

BoeingGuy wrote:

klm617 wrote:

jbs2886 wrote:

Great post, thank you for contributing. Its hard to respond to the one poster re: DTW, they have a bone to pick and its never based on logic. Adding routes is not favoritism of one hub over another, they are a lot more factors in play and you really went to the heart of it.

You think just because you learned it from a book that's how it is. Keep drinking that corporate Kool-Aid

Geezus, you really have some bizarre kind of paranoia that DL is out to get DTW; they hate DTW; and everyone else hates DTW.

Pretty soon DL will be de-hubbing DTW and moving everything to ATL and MSP because they have it out so much for DTW. Make you feel better to hear that so you can go wallow in your imaginary sorrow?

It is the only hub that get's reduced every quarter while the other hubs get additional service. Also s the premiere Asian gateway for Detroit got no service enhancement to ICN it got a capacity reduction. No domestic widebody flights all the other major Delta hubs have KLM Detroit doesn't. These things don't lie.

klm617 wrote:

BoeingGuy wrote:

klm617 wrote:

You think just because you learned it from a book that's how it is. Keep drinking that corporate Kool-Aid

Geezus, you really have some bizarre kind of paranoia that DL is out to get DTW; they hate DTW; and everyone else hates DTW.

Pretty soon DL will be de-hubbing DTW and moving everything to ATL and MSP because they have it out so much for DTW. Make you feel better to hear that so you can go wallow in your imaginary sorrow?

It is the only hub that get's reduced every quarter while the other hubs get additional service. Also s the premiere Asian gateway for Detroit got no service enhancement to ICN it got a capacity reduction. No domestic widebody flights all the other major Delta hubs have KLM Detroit doesn't. These things don't lie.

klm, I always find your posts intriguing if not laughable. You strike me as a PMNW employee that is still bitter about the merger nearly after decade after it was completed. I know everyone says you're a troll, but I think you're just a sad, angry former NWA employee with a victimist attitude that thinks Delta's network should revolve around your home airport. Your lack of ability to have any sort of objectivity about DTW is sometimes frustrating, but always entertaining.

Anyways, any time a major transaction like this occurs there are a lot of questions about what will happen going forward and all that most of us can do is speculate. I expect to see ICN capacity increase to the major hubs (ATL, SEA, and yes, even DTW). I also expect to see some new routes open to the new JV hub (PDX-ICN, MSP-ICN, SLC-ICN? BOS-ICN?). Only time will tell. This is an exciting development nonetheless and is really important for DL to remain competitive in the Pacific Asia region.